Brough's writings on the technology, economic and social issues of communications at the intersection of the Internet, telecom and mobility.

December 08, 2007

Ringback tone services have been wildly successful in many parts of Asia and they are emerging as a major money maker, not to mention a major music distribution channel, in many other countries, but not in the US or the EU.

Nearly 55% of Korean subscribers have ringback tone service. China Mobile has close to 50% adoption. Yet, as of September, adoption rates in most of Europe were below 10% (the UK was at 2%) and US adoption was only 5%. Since our LiveWire Mobile division provides white label managed ringback tone services and sells ringback tone service platforms, I'm obviously interested in understanding more. And, with 30+ operators on six continents using LiveWire Mobile platforms or services, I have some access to comparative data.

A late start is only part of the story. Korea went from 0 to 30% penetration in just nine months (April to December, 2002). China took a bit longer as the service only became available in stages across China Mobile's 31 separate, relatively autonomous, provincial units. That roll out took from mid-2003 to early 2004. But by the end of 2004, China Mobile had 30 million ringback tone subscribers (then 69M by 12/05 and 144M by 8/06). And yet after ~2 years of service, the US has only 12M subscribers or 5% penetration.

One clear difference in Korea and China, versus the US and EU, is the number of independent marketing organizations directly or indirectly promoting the new service. I remember visiting Seoul Korea in January 2003 and having a billboard pointed out to me where a Korean rock star was advertising his latest hit and how you could make it your color ring tone. I was told there were more than 20 independent organizations providing content for SKT's Color Ring service at that time. More significantly, revenue splits were such that these independent organizations found it worth while directly promoting their content to mobile subscribers. That means there were 20+ marketing teams with independent activities that all served to increase subscriber awareness.

Compare this with the typical operator in the US or EU where the only source of information or content is the operator's portal and the only service promotion activities are those of the operator. That means there is one product manager focused on ringback tones, they have a limited budget and they must compete with their associates for position on the operator's WAP deck. Is it any wonder awareness is low?

Of course other factors also contribute to service success. Our LiveWire Mobile team has accumulated a set of best practices based on discussions and consulting work with operators around the world. They have a formal service offer of course, but I'll endeavor to summarize some of their learning in a future blog post.